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Welcome / Blog Archive / Book Review / 2024-04-doc1 Assignment of claims, subrogation and set-off

2024-04-doc1 Assignment of claims, subrogation and set-off

My colleague from the University of Bari Aldo Moro, prof. Antonio Leandro, wrote a book (in Italian) under the title ‘Movement and Extinction of Commercial Credits in Conflicts of law of the EU. The ‘Rome I’ Regulation between the Internal Market and the Capital Market.’ It is a complex topic, not often addressed in depth. Reason enough to ask Antonio to provide a brief abstract in English. For all interested, especially those involved in complicated litigation in these matters.

Prof. Leandro writes:
Assignment of commercial claims, voluntary and legal subrogation, subrogation in multiple liability, and set-off trigger conflict-of-law issues in cross-border situations.
The Rome I Regulation on the law applicable to contractual obligations provides some solutions in this respect, helping interpreters coordinate the different laws that govern the claim, the act transferring the claim, the act triggering subrogation effects, and the set-off.
In so doing, the Rome I Regulation furnishes methods of coordination between different laws in seeking to balance the various interests underlying the operations above. It also adopts a wide-ranging meaning of the acts that bring about claims transfer. Illustrative is the all-inclusive meaning of assignment, which ranges from outright transfers of claims to transfers of claims by way of security pledges or other security rights over claims.
Methods of coordination between different laws not only shape a good conflict-of-law environment but also ensure legal certainty and predictability to secured transactions, loans, financing, and receivable-based securitizations. For this reason, the Rome I Regulation supports the EU policies devoted to establishing a Capital Markets Union (CMU), with particular regard to removing legal obstacles to the movement of claims and providing foreseeable rules for cross-border commercial and financial transactions. A so-shaped legal landscape should foster the EU market’s attractiveness and ease access to credit.
After elaborating on these general premises in the Introduction, the book explores the Rome I regime in 3 chapters, which deal respectively with the assignment of claims, subrogation phenomena, and set-off. In each chapter, the author finds that the Rome I provisions are well coordinated with each other also for the sake of the CMU policies above.
However, the Regulation seems to miss a crucial point. There are no expressed rules on the effectiveness of the assignment of claims vis-à-vis third parties, which is a pivotal issue for the same CMU policies. To fill in the gap, the European Commission adopted a proposal for a Regulation in 2018 that is still under the scrutiny of the Council and Parliament. The author critically addresses the proposed solutions and, after arguing that the Rome I Regulation actually provides an implied rule on the issue, backs the idea of setting distinct conflict-of-law rules depending on whether the assignment is or is not the basis of structured financing operations. In engaging on this specific issue, the author makes a comparison with the solutions provided in acts that UNIDROIT and UNCITRAL have adopted on the same or related topics.
All the issues above take on a special tone on the occasion of cross-border insolvency proceedings. Needless to say, claims and related transactions may be affected or prompted by insolvency proceedings. This is why the book focuses on whether the solutions provided by the Rome I Regulation may apply in an insolvency context and how they can be coordinated with the European Insolvency Regulation, which works as a lex specialis for conflict-of-law issues in insolvency proceedings. Each chapter includes final paragraphs that explore the interplay between the two Regulations to evaluate their consistency for the internal coherence of the EU business private international law.

Editore: Giappichelli; EAN: 9791221104356; ISBN: 1221104357